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Positive pay system for cheque payments to come into effect

Reserve Bank of India (RBI) will introduce a ‘positive pay system’ for cheque transactions from January 1, 2021. National Payments Corporation of India (NPCI) will make a positive pay system available in participant banks and will be a part of the cheque truncation system (CTS).

As a customer, if you issue the cheque, you have to click a picture of the cheque and upload it on the same bank’s app, ATM or share via SMS before handing it over to the beneficiary.

By this system, the bank knows who the cheque is drawn by and the beneficiary’s name before the latter depositing it. 

Hence, the bank can cross-check details of the physical cheque with the photograph before transferring funds. If the details don’t match in the CTS, redressal measures will be taken. 

Features of ‘Positive Pay System’!

The positive pay system will be available of cheques of Rs 50,000 and above. 

To ensure safety, key details will be re-confirmed for cheques above Rs 50,000 as a part of this system. In the case of transactions above Rs 5 lakh, banks may consider making it compulsory.

Under this system, the customer who issues the cheque will now need to submit electronically minimum details of that cheque like date, name of the beneficiary, payee, amount to the drawee bank among others.

The central bank regulator said, “Banks are advised to create adequate awareness among their customers on features of positive pay system through SMS alerts, displays in branches, ATMs as well as through their website and internet banking.”

The cheques in compliance with this system’s regulations will be accepted under the dispute resolution mechanism at CTS grids, RBI added. 

The banks can implement this system for cheques cleared and collected outside CTS.


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